Do a lot of investors use digital currencies like bitcoin? Are those digital currencies a big part of a lot of investors' portfolios? Are those digital currencies a threat to Fidelity in any way, or a potential ally? To find out, Fidelity Labs — the R&D arm of Boston-based Fidelity Investments — is starting a test to let its customers see their digital currency holdings on Fidelity.com, like any other security in their portfolio's summary view.
To run the test, which begins Aug. 9, Fidelity is partnering with Coinbase, a digital wallet and asset-exchange platform. Customers can give Coinbase permission to share data about their holdings in Coinbase wallet accounts with Fidelity.
Customers can then view their bitcoin, Ethereum and Litecoin balances like any other information in their Fidelity accounts.
"Bitcoin and other blockchain technologies are emerging from their infancy, but mass adoption is still many years away," Hadley Stern, senior vice president and managing director at Fidelity Labs, said in a release. "And don't underestimate their disruptive nature. Just as many other technologies have done in the past, bitcoin and blockchain will transform how we manage our finances."
Abigail Johnson, chairwoman and CEO of Fidelity's parent company, FMR, in May voiced her support for bitcoin and for blockchain — the record-sharing technology that enables bitcoin — in a keynote speech at the Consensus 2017 conference on bitcoin and blockchain in New York City.
As IBD reported, Johnson said that she hopes bitcoin and blockchain thrive because she sees them both making it easier for more people to invest and to use financial services in a world where the Internet of Things and artificial intelligence are increasingly dominant.
Bitcoin is a digital currency. It operates through its own blockchain, the shared, tamper-resistant record-keeping technology behind bitcoin that can also be used to verify other transactions.
Johnson said that she is in a traditional financial services business, but that her company could see that the evolution of technology is setting her industry up for disruption. In her prepared remarks, she said, "What if this technology could do for the transfer of value what the internet did for the transfer of information? There would be greater access to financial services and it would potentially give customers more control over their data."
Fidelity has a stake in the emerging technology. The organization has venture investments in organizations performing blockchain research, including TradeBlock and Axoni.